Margin

It is the amount added to the index rate on ARM in order to get an adjustable interest rate by the lender.

Maturity

It is the due date for repayment of any financial instrument or loan or bond.

Mortgage

A lawful document promising a lender a certain property as security or guarantee towards payment of a debt. Common misspellings: Mortage and Morgage

Mortgage broker

A mortgage company is one that has contacts with many lenders and informs the borrower about different loan options available. The mortgage broker accepts the application and processes the loan for a fee. He does not fund the loan.

Mortgage insurance

Insurance that protects the lender from incurring losses against non-payment of home loans. This is required for loans that have an LTV in excess of 80%. When the LTV is more than 80%, the borrower pays higher interest rate to the lender who then pays the premium to the mortgage insurance directly. Certain loan programs like first time home loans are covered by MI irrespective of the LTV percentage.

Mortgage insurance premium (MIP)

The amount charged to the borrower for mortgage insurance. Depending on the situation, it may be paid upfront, monthly or annually.

Mortgagee

The mortgage lender who recieves the mortgage as a pledge for repayment of the loan.

Mortgagor

The mortgage borrower who gives the mortgage as a pledge for repayment.

Manufactured housing

Homes that are built in a factory that can be placed temporarily or permanently on a piece of land. These homes range in style and price. They range anywhere from a trailer/mobile home to a custom looking home.

Market conditions

Factors that influence the sales of homes in specific areas, such as interest rates, home appreciation, employment rates, and time of year.

Market value

The price that a property is worth based on an agreeable situation between ready buyers and content sellers who have disclosed all the facts about the property.

Master planned community

A large development where all of the amenities that make a community are factored into the planning before construction commences. The community will include parks, shopping areas, and recreation. Often, these communities will be gated.

Maturity date

Regarding certificates of deposit, the date when the CD stops paying interest and the principal is given back to the buyer.

Maximum financing

When a lender's lowest permissible down payment is made, the borrower is given a mortgage with maximum financing.

Mechanical systems

Including the heating, cooling, plumbing and electrical systems in a house.

Median price

As asking price for a house which is an amount where half the houses in the same area sell for less and half sell for more.

Member bank

A bank with a membership in the Federal Reserve System.

Merged credit report

A combined credit summary from all three credit bureaus. These credit bureaus include: Experian, Transunion, and Equifax.

Merit aid

Education assistance given to students based on academic achievement, athletic, musical, or other talents and is not granted based on need.

Metes and bounds

A legal description of a parcel of land based on a surveyor's findings of measurements and angles.

Mill

In reference to real estate taxes, some states use a unit of taxation that equals one tenth of one cent, or $1 on every $1,000 of taxable property value.

Minimum payment option mortgage

A mortgage option where the borrower can pay an extremely low monthly payment, this usually will not cover the interest and the subsequent month's balance will be higher.

Mixed-income housing

A neighborhood with varying income levels.

MLS (Multiple Listing Service)

A shared list of information and details on properties that are available in certain areas.

Modification

A change in the terms of the loan or mortgage agreement.

Modified accelerated cost recovery system

Also known as MACRS (pronounced "makers"), the depreciation method generally used since 1986 to figure the deductions you get over the life of tangible property. Depreciation deductions for property in use between 1980 and 1986 are determined under the Accelerated Cost Recovery System (ACRS).

Money factor

A money factor is used to determine the lease rate for an automobile. It is the lease equivalent of the interest rate on a conventional loan. The money factor is the current annual percentage rate divided by 24.

Money market account

An FDIC insured deposit account that allows a maximum of six monthly withdrawals. This allows these accounts to remain liquid and are known as stable accounts because they invest in short term debts with maturities of under a year.

Money market funds

Mutual funds that invest in short term debts such as Treasury Bills, commercial paper, repurchase agreements, and certificates of deposits. These are not insured by the FDIC. It is possible to lose money with these funds.

Money market mutual fund

A fund that invests in short term paper debts, designed to produce high yields without the loss of capital.

Monroney sticker

The sticker seen on new car windows which lists the base price, the installed options, the manufacturers suggested retail price (MSRP), and the fuel economy and mileage. This sticker is required by law.

Monthly periodic rate

The yearly interest rate divided by twelve.

Mortgage acceleration clause

A term in the mortgage agreement that allows the lender to demand the full balance payment under certain circumstances, such as sale of the property, default on payments or refinancing.

Mortgage calculator

A program that potential homebuyers can use to determine what their monthly mortgage payment will be based on principal, interest, and the terms.

Mortgage interest expense

A tax term for interest paid on a loan secured by your home that is fully deductible, up to certain limits, when you itemize income taxes.

Mortgage life insurance

A policy taken out which covers the mortgage of the property if the owner dies.

Mortgage refinance

The option to pay off an old loan with a new one. This typically saves the borrowers money in terms of a lower interest rate or lower payments. The borrower may also opt to get cash out of his or her equity.

Mortgage interest deduction

A tax savings in which the government allows homeowners to deduct home loan interest from their income before calculating their taxes.

Motivated buyer

A buyer who is in a hurry to buy property.

Motivated seller

A seller who has an urgent reason to sell their property quickly.

Move-in condition

A house that is ready for new owners to move in.

Move up buyer

A buyer who is moving into a more expensive house.

Moving expenses

Expenses accumulated from moving oneself, your family and possessions due to a job. These expenses are tax deductible. Save all of your receipts from the move.

MSRP

Acronym which stands for Manufacturer's Suggested Retail Price.

Multifamily mortgage

A loan used to buy an apartment building and where the property is collateral.

Municipal housing inspector

An employee of the government who is sent out to inspect homes that are under construction to ensure that the contractors are building to code.

Mill rate

Mill rate, or millage rate, is a property tax term referring to the amount of tax charged for each dollar of a property's assessed value. The rate is expressed in mills, where one mill equals one-tenth of one cent, or $0.001.

Millage rate

Millage rate, or mill rate, is a property tax term referring to the amount of tax charged for each dollar of a property's assessed value. The rate is expressed in mills, where one mill equals one-tenth of one cent, or $0.001.

Min add'l invest

Min add'l invest, or minimum additional investment, refers to the smallest dollar amount that can be invested or contributed to an existing account. Mutual funds, for example, usually have a minimum additional investment.

Min check

Min check, or minimum check, is the lowest amount for which a draft can be written. This minimum restriction might be placed on a money market fund that has limited check-writing capabilities.

Min invest

Min invest, or minimum investment, is the smallest investment amount allowed, expressed either in dollars, or in share quantity. Mutual funds and bonds sold to individual investors often have minimum investment requirements.

Min IRA invest

Min IRA invest is the minimum balance required to open an Individual Retirement Account (IRA).

Mini perm

Mini perm is a type of financing typically used for commercial, industrial, or multi-family property. Commercial properties often cannot qualify for long-term, permanent financing until they've established operating histories; mini perm loans, therefore, are used to pay off the construction loans and bridge the gap until the property can qualify for permanent financing. Mini perms are typically structured with a three- to five-year maturity.

Minimum average balance to avoid fees

Minimum average balance to avoid fees is a requirement placed on some deposit and checking accounts. If the average balance (i.e., the daily balance divided by the number of days) falls below the minimum level, a maintenance fee will be charged to the accountholder.

Minimum balance to avoid fees

Minimum balance to avoid fees is a requirement placed on some deposit and checking accounts. If the balance at any point during a certain period--usually a month--falls below the stated level, the accountholder will be assessed a maintenance fee.

Minimum balance to open an account

Minimum balance to open an account is a requirement placed on some deposit, checking, and investment accounts. The account cannot be opened with any amount that's less than the stated minimum.

Minimum deposit

Minimum deposit is the smallest amount necessary to open an investment or mutual fund account. Minimum deposit amounts can range from a few hundred to a few thousand dollars.

Minimum down payment

Minimum downpayment is the lowest amount of cash that a borrower must put into a home purchase in order to qualify for the mortgage loan. The minimum down payment can be determined by the lender's standard requirements, by the borrower's income, or both.

Minimum payment

Minimum payment is the smallest payment amount a creditor will accept on a revolving debt without charging a penalty. Minimum payments are usually calculated as a small percentage (such as 3 percent) of the outstanding balance.

Mint condition

Mint condition describes a used item that doesn't exhibit any signs of wear or age. Usually something described as being in mint condition has a pristine, like-new quality.

Miscellaneous itemized deductions

Miscellaneous itemized deductions are certain expenses that can be listed on a U.S. tax return for the purpose of reducing income tax liability. Miscellaneous itemized deductions include job-related expenses, unreimbursed work-related expenses, and tax preparation fees. These expenses can only be deducted if they're in excess of 2 percent of the taxpayer's adjusted gross income.

Misselling

Misselling is the practice of intentionally misleading an individual about the details of a product or service in order to make the sale. An example of misselling would be when an aggressive salesperson pushes an individual into a high-fee annuity contract, without regard for whether the annuity is really the right program for that individual.

MMA - money market account

MMA, or money market account, is a high-yield checking/savings option provided by a bank. MMAs work like other checking accounts, except that they earn competitive yields, have minimum opening balances, and usually have restrictions on the number of withdrawals made within each period. If the bank is FDIC-insured, the MMA would be insured per the FDIC's coverage limitations.

MMDA

MMDA stands for money market deposit account. An MMDA is a high-yield checking/savings option provided by a bank. MMDAs work like other checking accounts, except that they earn competitive yields, have minimum opening balances, and usually have restrictions on the number of withdrawals made within each period. If the bank is FDIC-insured, the MMDA would be insured per the FDIC's coverage limitations.

Modified adjusted gross income (MAGI)

Modified adjusted gross income, or MAGI, is a measure of income used in the preparation of a U.S. tax return. In general, MAGI is adjusted gross income that's been increased or decreased by certain deductions and credits. Exact calculations for MAGI differ depending on how it's being used. A common use for MAGI is the determination of the deductibility of a Roth IRA, as defined in IRS Form 8606.

Modified fee-for-service

Modified fee-for-service is a method that insurance companies and medical groups use to compensate physicians for providing healthcare services. Under this arrangement, the physician is paid a set amount for each service, as defined by a fee schedule. In addition, the physician may be able to earn certain incentives, which are provided by the payer to keep costs low.

Modified pass-through

Modified pass-through describes a mortgage-backed security that guarantees interest and principal payments to certificate holders, regardless of whether the underlying mortgage payments are actually received. The payments are guaranteed by the Government National Mortgage Association, also known as Ginnie Mae.

Money at call

Money at call describes a loan for which the lender has the right to demand full and immediate repayment.

Money management

Money management is a general term referring to the responsible use of cash. Money management includes budgeting, saving, paying debts, and investing. The term is also sometimes used interchangeably with investment management or portfolio management, both of which refer specifically to defining and implementing an investment program.

Money manager

A money manager is a trained individual who's paid to research and select investments for customers. Money managers can work for individual, corporate, or institutional investors.

Moratorium

A moratorium is a holding period during which a certain activity is temporarily suspended. In bankruptcy, for example, the court puts a moratorium on debt collection, meaning debt collectors have to cease their efforts to contact the debtor.

Morning loan

A morning loan is a type of funding offered to brokers for the purchase of security. Funds are advanced with the promise that the broker will deliver the purchased securities to the bank later that same day. Once the securities are received, they become collateral, and the loan is converted to a broker's loan.

Mortality and expense risk charge

Mortality and expense risk charge is a fee charged on a variable annuity contract. The charge is assessed as a percentage of the account value, and is intended to compensate the insurance company for the risks it assumes under the annuity contract. If, for example, the annuity guarantees payments for the insured's lifetime, the insurance company accepts the risk that the insured will live significantly longer than expected.

Mortgage accelerator

A mortgage accelerator is a specialty mortgage loan that combines the characteristics of a checking account with the characteristics of a home equity line of credit. The borrower deposits regular income into the account, which immediately reduces the loan balance. Monthly expenses are paid out of the account, and these increase the loan balance. At the end of the month, any deposited amount that's not withdrawn to pay expenses, goes towards the loan balance as a principal repayment. Over time, the borrower accrues interest more slowly, and is therefore able to pay off the debt balance more quickly.

Mortgage banker

A mortgage banker is an individual or entity that originates real estate property loans in its own name. After funding, the loans might be held in the banker's portfolio, or sold to investors.

Mortgage Bankers Association - MBA

Mortgage Bankers Association, or MBA, is a national industry association that promotes standards of practice for professionals working in real estate finance.

Mortgage banking

Mortgage banking is the practice of originating real estate loans. Once the loans are originated, they're often sold by the mortgage banker to investors.

Mortgage bond

A mortgage bond is a corporate debt instrument that's supported by real estate property collateral. Bondholders have a claim on the collateral property if the corporate borrower defaults.

Mortgage constant

The mortgage constant is the quotient of the total annual debt payments on a mortgage divided by that mortgage's original balance. The mortgage constant is also known as the mortgage capitalization rate.

Mortgage debt

Mortgage excess servicing

Mortgage excess servicing, on a mortgage-backed security, is the percentage of interest that's left after subtracting the MBS coupon rate and servicing and underwriting fees from the underlying mortgage note rate. The mortgage excess servicing, which would be a fraction of 1 percent, is paid to the loan servicer.

Mortgage forbearance agreement

Mortgage forbearance agreement is a mutually accepted arrangement between a borrower, who has defaulted, and a lender, whereby the lender agrees not to foreclose upon certain conditions. The borrower agrees to a specific repayment plan so that the loan will become current at a certain future date. Forbearance is only appropriate where the borrower fell behind in payments due to a temporary setback.

Mortgage index

A mortgage index is the underlying benchmark that drives the interest rate on an adjustable-rate mortgage (ARM). Rates on ARMS have two components: the index and the margin. The index, which is always a published statistic, is the variable component of the rate; it moves up and down as economic conditions change. Examples of mortgage indices include the prime rate, one-year constant maturity treasury, or LIBOR.

Mortgage lien

A mortgage lien is the claim that a lender places on a property when that property is used to secure a loan. If the property owner defaults on the loan, the lender (or lienholder) has the right to foreclose and sell the property.

Mortgage loan

A mortgage loan is a debt instrument that is secured by real estate property. The terms mortgage loan and mortgage are used interchangeably.

Mortgage note

A mortgage note is a document that details the terms of a promise to repay a real estate loan. The note will list the names of all borrowers and lenders, as well the loan amount, rate of interest, and structure and timing of repayments.

Mortgage originator

A mortgage originator is a company or individual that assists prospective borrowers through the loan application and funding process. The originator provides the initial loan funding, but may sell the loan to another entity shortly after funding. Mortgage brokers and mortgage bankers can be mortgage originators.

Mortgage par rate

A mortgage par rate is a reference point used by lenders to evaluate a mortgage's value. If a mortgage carries an interest rate higher than the par rate, the lender will pay a premium to purchase that mortgage. If the mortgage's rate is lower than the par rate, the lender will only pay less than face value to purchase the mortgage.

Mortgage pass-through security

A mortgage pass-through security is an investment vehicle that's backed by a pool of mortgage loans, where the investor receives principal and interest payments (less a fee) as payments are made on the underlying mortgage loans.

Mortgage pipeline

A mortgage pipeline is the collection of loans that have been approved and locked in by the mortgage originator, but not yet funded. Mortgage loans are taken out of the pipeline if the borrower backs out, or if the loan funds. Upon funding, the loans are either sold on the secondary market, or placed in the originator's portfolio.

Mortgage pool

A mortgage pool is a group of real estate loans that are used as collateral to support a mortgage-backed security, or MBS. Mortgage pools often contain loans that have similar maturities and terms, but the pool can also be more diversified for complex securities.

Mortgage rate

Mortgage rate is the percentage used to calculate interest expense on a real estate loan.

Mortgage rate lock

A mortgage rate lock is an agreement between a prospective borrower and lender that the mortgage loan will be available to the borrower at the stated interest rate for a certain period of time. If market rates change before funding, it doesn't affect the locked mortgage loan.

Mortgage rate lock deposit

A mortgage rate lock deposit is a non-refundable amount that a lender will charge a prospective borrower to guarantee a certain interest rate on a mortgage loan, under the condition that the loan funds within a certain timeframe. Once the loan funds, the deposit is credited back to the borrower. Not all lenders charge mortgage rate lock deposits.

Mortgage rate lock float down

A mortgage rate lock float down is a type of deposit that a prospective borrower can put down to fix the interest rate on a mortgage loan. Rate locks are put in place after the loan is approved and before the loan funds. A rate lock with a float down option protects the prospective borrower from rate increases, but also allows the borrower to take advantage of rate decreases that occur prior to funding. This arrangement is more expensive than a conventional rate lock deposit, which merely fixes the rate at a set value.

Mortgage recast

A mortgage recast is a permanent alteration of a mortgage's payoff structure. Some mortgage loans allow for recasting under certain situations, such as when the borrower is financially distressed. In this case, the maturity could be extended, or the interest rate could be reduced. Mortgages that allow unpaid interest to be added into the principal balance (e.g., option ARMs), have to be recast so that the debt is eventually repaid.

Mortgage REIT

A mortgage REIT (real estate investment trust) is an entity that invests in real estate property loans. The REIT may act as a mortgage originator, or purchase the loans on the secondary market. Mortgage REITs obtain their equity capital by selling shares to investors who want to participate in the REIT's professionally managed portfolio.

Mortgage risk

Mortgage risk is the likelihood that the borrower on a real estate property loan will not make the debt payments as promised.

Mortgage servicing

Mortgage servicing is the process of managing the administrative details of a mortgage loan. These details include collecting principal and interest payments, forwarding repayments to the mortgage lender (if the lender is not the servicer), managing escrow accounts, making payments to insurance companies and tax collectors, etc. Mortgage servicers earn a fee. Also, the rights to service a loan can be bought and sold, just as the loan itself can be bought and sold.

Mortgage servicing rights - MSR

Mortgage servicing rights, or MSR, is a claim on the responsibility to administer a mortgage and earn the resulting fee. Mortgage servicing involves collecting principal and interest payments, forwarding repayments to the mortgage lender (if the lender is not the servicer), managing escrow accounts, making payments to insurance companies and tax collectors, etc. Mortgage servicing rights can be bought and sold.

Mortgage-backed certificate

A mortgage-backed certificate is a security that allows investors to participate in a portfolio of mortgage loans. The security is supported by an underlying pool of mortgages, so that investors earn income as repayments are made on those mortgages. Mortgage-backed certificates are also known as mortgage-backed securities (MBS).

Mortgage-backed securities - MBS

Mortgage-backed securities, or MBS, are investment vehicles that allow investors to participate in a portfolio of mortgage loans. The security is supported by an underlying pool of mortgages, so that investors earn income as repayments are made on those mortgages. Mortgage-backed securities are also known as mortgage-backed certificates.

Mortgage-backed security

A mortgage-backed security, or MBS, is an investment vehicle that allows investors to participate in a portfolio of mortgage loans. The security is supported by an underlying pool of mortgages, so that investors earn income as repayments are made on those mortgages. Mortgage-backed securities are also known as mortgage-backed certificates.

Mortgage-interest deduction

Mortgage-interest deduction is an IRS-defined tax break available to homeowners who have a mortgage loan. Mortgage interest is normally deductible if the related financing is used to purchase or improve a primary or secondary home.

Mortgager

A mortgager is the borrower on a real estate property loan.

Move-up buyer

A move-up buyer is a prospective homebuyer who owns a home already, but wants to replace that property with a larger, or more expensive home.

Multidwelling property

A multidwelling property has more than one living unit on a single plot of land.

Multiple Listing Service - MLS

Multiple Listing Service, or MLS, is a marketing organization comprised of real estate brokers who agree to pool their home listings. The MLS makes the home search more efficient for home seekers, and provides brokers with access to a larger audience.

Mutual fund

A mutual fund is a professionally managed portfolio of securities that builds capital by selling shares to investors. Mutual funds give the individual investor access to a diversified, regulated portfolio. The fund publishes its investment strategy and objective along with its historic performance in a prospectus. Gains or losses in the portfolio are shared by the shareholders/investors.